You are an Audit Manager and are currently reviewing the working papers of ABC Ltd for the year end 30 June 2020. The field work was performed by an Audit Senior and two assistants. You note the following points on file. For the item below, analyse the conclusions reached by your staff and comment: Has sufficient appropriate evidence been gathered in each case? If not, what additional testing should be done.

Item:

1) The accounts payables balance consists of 10 large and 100 small creditors. The audit senior notes, 'As per last year I selected 15 creditors from the year-end listing and verified all creditor reconciliations were done correctly. The list total agreed to the general ledger control account. Hence, accounts payables are fairly stated.'

2) ABC were fined $180,000 by the Brisbane City Council for setting up a retail outlet at the back of one of their warehouses without permission. They have paid the fine but are appealing and are highly confident of recovery in full. Hence the Current Assets section of the Balance Sheet includes an amount of $180,000 as an Other Debtor'. The Audit Senior has noted all the details and vouched the payment to bank statements and the official receipt. Hence, he concludes, `Balance fairly stated'.